Legence Sets Record Revenues and Backlog, Fueling Upward Guidance for 2026
Revenues More Than Double as Company Delivers on Growth Initiatives
Legence Corp. (NASDAQ: LGN) has kicked off 2026 with a commanding financial performance, reporting its highest ever quarterly revenues of $1.04 billion—a 105% year-over-year increase. Excluding contributions from the recent Bowers acquisition, organic revenue still surged by 57%, pointing to broad strength across the company’s core business segments. These results come as demand remains strong in markets ranging from education and data centers to healthcare and government, helped along by solid project execution and recently integrated acquisitions.
Record Backlog Suggests Ongoing Growth Momentum
Perhaps even more telling for investors is Legence’s expanding consolidated backlog, which doubled from last year to reach $5.38 billion at the end of Q1 2026. A book-to-bill ratio of 1.2x—above the key threshold of 1.0x—signals that the company is booking new work faster than it’s recognizing revenue, extending visibility into future performance. This backlog was driven by a 150.7% increase in Installation & Maintenance segment awards (partly due to the Bowers acquisition) and a 12.9% gain in Engineering & Consulting, reflecting robust demand in data center, technology, and government sectors.
| Key Operating Metrics (Q1 2026 vs. Q1 2025) | Q1 2026 | Q1 2025 | Year-Over-Year Change |
|---|---|---|---|
| Revenues ($M) | 1,037.89 | 505.95 | +105.1% |
| Gross Profit ($M) | 186.15 | 111.70 | +66.6% |
| Non-GAAP Adjusted EBITDA ($M) | 118.10 | 50.82 | +132.4% |
| Backlog & Awarded Contracts ($B) | 5.38 | 2.64 | +103.9% |
| Book-to-Bill Ratio | 1.2x | 1.4x | -0.2x |
Profitability Expands Despite Margin Pressures
Legence’s profit picture improved markedly, with non-GAAP adjusted EBITDA up 132% to $118.1 million. Net income swung to $16.1 million from a $21.2 million loss a year ago. A notable headwind: gross margin slipped to 17.9% (from 22.1%), primarily due to changes in business mix and higher subcontractor costs. Management noted that excluding certain outside compensation expenses, adjusted gross margin stood at 18.7%.
| Segment | Revenue ($M) | Adj. Gross Profit ($M) | Adj. Gross Margin (%) |
|---|---|---|---|
| Engineering & Consulting | 165.80 | 55.02 | 33.2% |
| Installation & Maintenance | 872.09 | 138.82 | 15.9% |
Raised Guidance Underscores Management’s Confidence
Looking ahead, Legence lifted outlooks for both Q2 and the full year. Second quarter revenues are projected at $1.05–$1.1 billion with non-GAAP adjusted EBITDA between $115–$125 million. Full-year 2026 guidance now stands at $4.1–$4.3 billion in revenues (up from $3.7–$3.9 billion previously) and $470–$490 million in adjusted EBITDA. The company’s healthy cash position ($244.6 million) and improving leverage metrics (adjusted net leverage at 1.8x) provide further support for the expansion strategy.
Strategic Drivers: Organic Growth and Accretive Acquisitions
Both of Legence’s segments are contributing to the momentum, but the Installation & Maintenance group stands out with 141.9% growth. Even excluding Bowers, the organic increase was 74.4%, a testament to strong demand especially in technology and data center projects. The company’s ongoing integration of recent acquisitions is helping to deliver diversified growth without losing sight of operational efficiency.
Key Takeaway: Visibility and Capacity Position Legence for Sustained Growth
Legence’s record revenues and backlog—coupled with raised guidance—paint a picture of a company capitalizing on end-market tailwinds and effective execution. While margins are being watched due to mix and cost factors, management’s confidence in higher annual growth targets suggests this could be a company to monitor as it continues to expand market share. With strong cash reserves and a modest leverage ratio, Legence appears well-positioned to pursue further opportunities across service lines and industries.
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